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2022-23 Federal Budget – What We Know And How It Effects Real Estate

Buying Tips

The 2022-23 Federal Budget has officially been handed down, so what does this all mean for Real Estate? Within the budget there were a few different strategies aimed at assisting the housing industry, read on to find out more… 

 

National Housing Accord

Housing supply has been one of the focuses with the Federal Government setting a target to build one million affordable homes over a five year period which commences in 2024. This will be done through a new National Housing Accord, which has been seen as a good start to tackling the housing crisis but is definitely far from a solution. Under this accord both state and territory governments will be accountable for meeting these targets and changing land release and zoning of properties. 

Another item the accord is focusing on is 10,000 new affordable 7-star rated, which is the new standard raised from 5.5 stars,  green homes which will be funded through a new financing model through the accord. The Nationwide House Energy Rating Scheme (NatHERS) rates Australian homes out of 10 based on its energy efficiency, things that impact the rating are: Layout, Insulation, Design Features, Building Materials, Orientation and Aspect.

The breakdown

The Federal Government has also extended the exemption of home sale proceeds from asset testing which is especially important for pensioners looking to relocate without affecting their pensions. 

 

A few other mentions are the previously announced: Help to Buy equity scheme, First Home Guarentee Scheme, Regional First Home Support Scheme being actioned. All housing tax settings are safe (including negative gearing). The acceleration of the $10 Billion Housing Australia Future Fund. 

What the experts say

REIA President Hayden Groves highlighted the importance to remember that the recent budget won’t be an immediate fix to the housing and rental affordability issues. 

 

Mr Groves mentions “Since May, repayments on a $500,000 mortgage have increased by almost $700 each month, and household savings is forecast to slump below pre-pandemic levels,” 

 

“Constraints on housing supply, including a backlog of new builds from supply chain pressures, all mean affordability pressures for home buyers and renters are unfortunately likely to continue.” 

 

“affordable housing measures, whilst both necessary and welcome, will have no immediate impact on housing and rental affordability and availability woes for many Australians”. He concludes.

 

So we can definitely see a firm stance on housing supply and affordability with the 2022-23 Federal Budget.

Perth Property Market Stays Strong

Selling, Selling Tips

Over the last few weeks we have been inundated with information about property prices slowing due to interest rate hikes. While we can’t deny this is happening in a few states, we aren’t seeing this for the Perth property market. In fact, sixty five suburbs in Perth have had median sales prices increase over the month of July. 

REIWA President Damian Collins said “The Perth market typically slows in winter, so it’s pleasing that when we drill down to suburb level, a large number are still seeing growth – especially considering the three recent interest rate rises,”

 

We have found buyers are still out in force, and aren’t deterred by the wild weather Perth has been experiencing. One of the Naked Edge Real Estate properties had a private viewing scheduled for 2pm Tuesday (2nd of August) which was one of the many days we have had strong storms this week, in the morning of that viewing the agent for this property decided to open it to the public. The home open was only advertised to the public for a few hours, and yet four parties came through plus the original interested viewer and an offer was made on the same day. 

 

After the interest rate rises were announced most capital cities experienced at least a slight decline in home values, but the Perth property market has still seen continued growth. Mr Collins has a few suggestions as to why we are seeing this trend in other capital cities but not our own, he states

“Western Australia’s strong economy, growing population and affordable housing mean we are in a much better position to manage the increased costs of servicing a loan than our east-coast counterparts. We’re also experiencing a housing and labor shortage simultaneously. We have low stock levels and properties are not being built quick enough. For as long as this remains an issue, competition amongst buyers will remain high and prices will continue to rise.”

 

Time on Market and Listing Numbers

Perth Properties are staying on the market for a day longer than June. The median time to sell a house is sitting at 17 days for July, but even with a slight decline this is still two days faster than July of last year. The amount of listings, which on REIWA is currently 8,592, is still at a similar level to the June numbers. These low listing numbers could be part of the reason the housing market remains so competitive in Perth compared to other states. 

 

The fastest selling suburbs for July were as follows:

  • East Cannington: Average of 4 days on market
  • Parmelia: Average of 5 days on market
  • Orelia: Average of 5 days on market
  • Erskine: Average of 6 days on market
  • Padbury: Average of 6 days on market.

 

 

 

Perth House Prices Highest in Years- And they Won’t Slow Down Yet.

Selling Tips

As a Real Estate Agency we often get asked when is a good time to sell your property, and while there are many factors that go into this answer we think the current market is ideal if you’re looking to sell quickly and get a great price! 

Want to know why we say that so confidently, then read on.

 

Median House Prices Soar

The median Perth house price has risen again, now officially surpassing the median recorded during the housing boom of 2014. Domain statistics have shown that the price of a Perth home has increased by 1.5% in the first three months of 2022 alone! The Median price for a house in Perth is now sitting at $622,000 compared to the previous record of $616,000 in 2014. 

 

During the pandemic families realized they needed bigger yards, and more space inside and they were happy to pay to upsize. With the Perth borders now open, and interstate buyers running to enter the property market we’ve seen an influx in interest in Perth property to live and invest. This isn’t slowing down either, while we’ve seen an initial rush from interstate buyers and Perth residents moving back home we predict there are still individuals that are keen to enter the market who haven’t made the first step yet. While the property prices smash Perth records, they are still relatively affordable compared to the other capital cities which is why the property shortage won’t ease for a while and why we can confidently say our vendors are getting great prices for their properties and they’re selling in weeks. Perth property overall continues to sell quickly, and produces great prices for sellers. 

 

The President of the Real Estate Institute of WA, Mr. Damian Collins has explained that he believes these conditions will continue for the remainder of the year 

“We don’t anticipate market conditions slowing any time soon, with a further 10 per cent price growth expected in the 2022 calendar year.”

 

2022 Federal Election- How it Affects the Current Market

The above figures can comfort buyers and sellers that are anxious with the incoming 2022 Federal Election. From what both of the major parties have currently announced, neither party has said they will make any major changes to housing policy which could impact property investors, first time buyers or general buyers. Experts are saying that this time around the election should have very little impact on buyer and seller confidence, or market conditions which is a relief for all. In the 2016 and 2019 Elections the proposed changes to negative gearing lead to market doubt, but in the current election there is bipartisan support to hold on to negative gearing which means more certainty for the property market. So even with an upcoming Federal Election, we can see that the Perth Property Market will remain strong.

 

While writing this blog post the Labor party has announced a new shared equity scheme. This would actually make it easier to enter the housing market for individuals earning less than $90,000, or couples earning less than $120,000 that have no property currently. The scheme has 10,000 spots available, and sees the government cover 30-40% of the purchase price by taking part ownership of the property. The percentage is able to be bought back by the homeowner from the Government, or they can leave the shared ownership. The only conditions are to live in the property for two years and, if an owners’ income increases during this period, they would be required to start purchasing more of the property.

 

Are you looking to sell your home? Why not book a free appraisal with one of our agents, and see how your property measures up in the current market.